There’s still potential for solid growth under mouse’s ears

Disney (NYSE: DIS) stock has surged more than 30 percent over the past year and has averaged annual growth of about 15 percent over the past 30 years.

With its stock near an all-time high and the company sporting a market value above $110 billion, is it too late to join the party? Probably not.

Naysayers may point to the company’s box-office flop in “The Lone Ranger,” but that’s more than offset by the success of “Iron Man 3” and Pixar’s “Monsters University” — and Disney stands to make a lot more money from its newly acquired “Star Wars” and Marvel assets. Disney is a powerhouse on the small screen, too, with ESPN, and it’s getting into console gaming with its new Disney Infinity offering.

Meanwhile, parks and resorts are Disney’s second-biggest business and its fastest-growing segment. Attendance has been growing faster at international parks than domestic ones, and developing economies hold a lot of potential park visitors. Disney has regularly hiked its park prices, enjoying strong brand power.

Disney is likely to keep prospering in the near, and far, future. It’s hard to argue that Disney stock is cheap, but sometimes you have to pay up for a great company.

Ask the Fool

Question: Where can I find the earnings reports that companies file with the Securities and Exchange Commission?

Answer: Many financial websites offer access to these filings in their stock data offerings. You can also go right to the SEC itself, at sec.gov — click on “Filings.” It’s smart to look up annual 10-K and quarterly 10-Q reports, as they can tell you a lot about a company.

Fool’s school

Commission costs cost: Many of us should pay more attention to commission costs when buying and selling stocks, and some of us should pay less attention.

Those who trade only a few times a year can pay relatively little attention to commission costs. Everyone else should aim to not pay too high a percentage of an investment for the commission. For example, imagine that you invest $150 in shares of Bright Idea Light Bulb Co. (ticker: UREKA), and you pay a $20 commission. Divide $20 by $150 and you’ll get 0.13, or 13 percent. That means you’ve invested $150, but at the same time you forfeited 13 percent of that value in commissions. If the shares rose 13 percent in the first year, you’d barely break even, instead of realizing a significant gain.

It’s worse if you’re more of a speculator than an investor, buying and selling frequently. In that case, you might invest the $150, pay $20, and then pay $20 again soon after, when you sell the shares. You’d have forked over $40 on a $150 investment!

Aim to keep your commission costs at 2 percent or less per trade, if possible. If your brokerage charges $20, then try to invest at least $1,000 each time you buy stock. (Multiply the commission by 50 to see what it’s 2 percent of.) If your brokerage charges $8, your minimum would be $400. You can always save up money until you have enough.

If you’re like many people, though, the idea of waiting until you’ve gathered $1,000 is discouraging. Fear not — you have options. For starters, you can switch to a less pricey brokerage. Some charge just $5 or less. Remember to evaluate factors other than commission costs, too, such as fees, services, accessibility and customer service.

You can also invest small sums regularly through direct investing plans (Drips), which let you buy stock directly through companies, bypassing brokerages altogether. Many major companies offer Drips.

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